Re: "Boathouse plans don't allow for enough parking," letter to the editor, Wednesday, May 30.

The writer makes some very good points on a number of issues - the look, congestion, access to Rocky Point, etc.

I would like to clarify one assumption - that the restaurant will definitely generate more income for the city than the boat launch.

According to official City of Port Moody financial plan figures, the boat launch has been, and is expected to continue, generating $65,000 to $70,000 per year in revenue.

The Boathouse Restaurant is expected to generate $40,000 in lease revenue for the year 2007. The lease revenue will increase to $45,000 per year for the following nine years.

Given the large size of the restaurant, this works out to a lease cost of approximately $5 per square foot (for the building, not taking into account the converted parking space).

This is well below normal market lease rates.

If the restaurant can manage to gross in excess of $3 million in any given year, the city will be entitled to 3.5 per cent of whatever this extra amount turns out to be.

For example, if the restaurant grosses $3.5 million, the city would be entitled to 3.5 per cent of half a million, which works out to $17,500.

If the restaurant grosses $4 million, this would increase to $35,000.

For the restaurant to gross $3 million per year, it will need to have an average revenue of more than $8,000 every single day of the year.

If the average customer spends $40, more than 200 customers will be necessary every day.

If there are just 100 customers at $40 each on one day, there must be 300 customers another day to make up the difference.

If the average customer spends less than $40, more customers will be necessary.

With a yearly lease of $45,000 after 2007, if the restaurant manages to achieve a gross revenue of $3.5 million, the city would receive $45,000 plus $17,500 for a total of $62,500.

Taxes will add somewhat to the annual total to the city.

Costs to the city: $20,000 budgeted for a parking attendant for peak use months, due to loss of boat trailer parking; $350,000 to $500,000 (depending on how much remedial work is done) to find extra space for boaters, including more dock tie-up space to alleviate congestion (as promised in a council meeting in the summer of 2006 when this project was given the go-ahead for development, despite very vocal opposition) and potential extra policing costs.

The boat launch revenue is similar to the projected restaurant revenue.

If there is no loss in boat launch revenue, then the city may gain somewhat - until one takes into account the costs noted above that were not part of the equation when there was no restaurant.

If the city loses some boat launch revenue due to lack of parking and congestion issues, the economic forecast becomes bleaker.

In a nutshell, it is understandable and natural to assume that the restaurant would produce more revenue than the boat launch and result in a net gain to the city, or it would not have been approved.

However, the facts suggest otherwise - that this was a bad deal for the city, residents and other stakeholders.

But maybe not a bad deal for the restaurant owners.

And it's probably worth noting that this deal was a "flip" - approved and then sold to American owners very quickly after the development permit was granted.

Hazel Mason
Port Moody

published on 06/08/2007